01. 
From the following data, calculate labour variances;
The budgeted labour force for producing product A is:
25 Semiskilled workers @ Rs. 7.50 per hour for 50 hours
15 Skilled workers @ Rs. 8.25 per hour for 50 hours
The actual labour force employed for producing A is:
28 Semiskilled workers @ Rs. 7.00 per hour for 50 hours.
14 Skilled workers @ Rs. 8.50 per hour for 40 hours
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]

02. 
A contract job is scheduled to be completed in 40 weeks with a labour complement of 80 skilled operatives, 50 semiskilled operatives and 70 unskilled operatives. The standard weekly wages of each type of operatives are – skilled Rs. 250 semi skilled Rs. 156 and unskilled Rs. 124. The work is actually completed in 42 weeks with a labour force of 75 skilled, 50 semiskilled and 80 unskilled operatives and the actual weekly wages rates average Rs. 265 for skilled: Rs. 140 for semiskilled and Rs. 120 for unskilled labour. Analyse the variances in the labour cost due to various reasons.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]

03. 
The standard labour force of Mahan Plastics Ltd. is as under:
 Rs. 
60 skilled men at Rs. 5.00 Paise per hour for 25 hours  7,500 
80 semi – skilled men at Rs. 3.50 per hour for 40 hours  11,200 
 18,700 
 Rs. 
75 skilled men at Rs. 6.00 per hour for 24 hours  10,800 
100 semi – skilled men at Rs. 3.40 per hour for 42 hours  14,280 
 25,080 
Analyse the Labour Variances.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0; LYV/LSUV = ;]

04. 
The following data have been taken from the cost records of EMILY Ltd.
Standard  Actual 
Grade A 100 workers @ Rs. 12 p.h.  Grade A 122 workers @ Rs. 12.50 p.h. 
Grade B 75 workers @ Rs. 10 p.h.  Grade B 88 workers @ Rs. 9.50 p.h. 
Budgeted hours 80 per worker  Actual Hours 80 per worker 
Standard yield 4,000 units  Actual production 4,100 units 
Calculate all labour variances.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]

05. 
Given the following particulars, analyse the labour variance.
Standard 
Actual 
Labour 
No.of persons 
Rate 
Hours worked 
Labour 
No. of persons 
Rate 
Hours worked 
Grade I 
90 
Rs. 10 
100 
Grade I 
85 
Rs. 12 
120 
Grade II 
55 
Rs. 8 
100 
Grade II 
55 
Rs. 7.50 
120 
Grade III 
40 
Rs. 6 
100 
Grade III 
50 
Rs. 7 
120 
Standard rate production:200 units 
Actual production:190 units 
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]

06. 
Calculate variances from the following data:

Standard 

Actual 
Number of men employed
Output in units
Number of working days in a month
Average wages per man per month

80
4,000
25
Rs. 1,200


90
4,180
24
Rs. 1,140

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0; LYV/LSUV = ;]

07. 
A contract job is scheduled to be completed in 40 weeks with following labour force:
Skilled 
140 
weekly wage 
Rs. 500 
Semi –skilled 
70 
" 
" 
Rs. 450 
Unskilled 
90 
" 
" 
Rs. 350 
The work is actually completed in 44 weeks with the following labour force
Skilled 
150 
weekly wage 
Rs. 515 
Semi –skilled 
80 
" 
" 
Rs. 440 
Unskilled 
70 
" 
" 
Rs. 365 
Analyse variances in labour cost.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]

08. 
Standard labour hours and rate for production of Article SARD are given below:

Hrs 
Rate (Rs.) 
Total (Rs.) 
Skilled Workers 
8 
15 per hour 
120 
SemiSkilled Workers 
7 
12 per hour 
84 
Unskilled Workers 
5 
8 per hour 
40 



244 
Actual data


Rate Per hour (Rs.) 
Total (Rs.) 
Articles Produced 
1,000 units 


Skilled Workers 
7,800 hrs 
16 
1,24,800 
Unskilled Workers 
5,200 hrs 
8.50 
44,200 
SemiSkilled Workers 
7,250 hrs 
13.40 
97,150 



2,66,150 
Calculate all possible labour/labor variances.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 and LYV/LSUV = ;]

09. 
The details regarding the composition and the weekly wage rates of labour force engaged on a job scheduled to be completed in 50 weeks are as follows:
Category of Worker 
Standard No. of Labour 
Weekly Wage Rate per laborer 
Actual No. of Labor 
Weekly Wage Rate per labourer 
Skilled 
70 
250 
70 
260 
SemiSkilled 
55 
225 
60 
225 
Unskilled 
75 
150 
80 
140 
The work is actually completed in 60 weeks. Calculate the various labour variances.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]

10. 
The standard of labour mix for producing an article in a particular week is:
45 men @ Rs. 12 per hour for 50 hours
25 women @ Rs. 10 per hour for 40 hours
15 boys @ Rs. 8 per hour for 50 hours.
But actual labour force used during that week was:
42 men @ Rs. 13 per hour for 55 hours.
20 women @ Rs. 11 per hour for 40 hours.
8 women @ Rs. 10 per hour for 40 hours.
13 boys @ Rs. 8.25 per hour for 60 hours.
You are required to calculate all possible labour/labor variances:
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]

11. 
The budgeted labour force for producing 1,000 articles ‘X’ is


Total standard Hours 

Total standard Cost (Rs.) 
40 men 
@ Rs. 5 per hour for 50hrs 
2,000 

10,000 
25 women 
@ Rs. 3 per hour for 40 hrs 
1,000 

3,000 
20 boys 
@ Rs. 2.50 per hour for 25 hrs 
500 

1,250 


3,500 

14,250 
The actual data and related work force are as follows:
Articles produced, 1,000


Total actual Hours 

Total Cost (Rs.) 
55 men 
@ Rs. 6 per hour for 50 hrs 
2,750 

16,500 
20 women 
@ Rs. 2.50 per hour for 30 hrs 
600 

1,500 
10 boys 
@ Rs. 3 per hour for 15 hrs 
150 

450 


3,500 

18,450 
Calculate all possible Labour/Labor variances.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0;LYV/LSUV = ;]

12. 
Standard 
For
100 hours


Grade A : 80 workers @ Rs. 13 per hour
Grade B : 70 workers @ Rs. 11 per hour

Actual 
For
100 hours


Grade A : 78 workers @ Rs. 12.50 per hour
Grade B : 72 workers @ Rs. 10 per hour

Calculate all possible Labour/Labor Variances
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ;LYV/LSUV = ;]

13. 
The standard labour component and the actual labour component engaged in a week for a job areas under:


Skilled workers 
Semiskilled workers 
Unskilled workers 
(a) 
Standard number of workers in the gang 
28 
12 
10 
(b) 
Standard wage rate per hour (Rs.) 
15 
12 
10 
(c) 
Actual number of workers employed in the gang during the week 
25 
14 
11 
(d) 
Actual wage rate per hour (Rs.) 
16 
12 
9 
During the 40hours working week, the gang produced 1,800 standard labour hours of work.
Calculate the different labour variances.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]

14. 
The original standard rate of pay in a factory was Rs. 8 per hour. Due to settlement with trade unions, this rate of pay per hour is increased by 15%. During a particular period, 8,000 actual hours were worked whereas work done was equivalent to 6,400 hours. The actual labour cost was Rs. 76,800. Calculate labour variances.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ; LYV/LSUV = ;]

15. 
A large manufacturing company with a diverse range of products is developing the use of standard costing throughout its divisions. A full standard costing system has already been implemented in Division A, including the sue of mix and yield material variances, and attention has now turned to Division B where the main problem concerns labour.
Division B makes highly complex work stations which incorporate material handing, automatic controls and robotics. Manufacture is a team effort and the team specified for work station 26 comprises:
2 supervisors paid Rs. 8 per hour
10 fitters paid Rs. 6 per hour
6 electricians paid Rs. 6 per hour.
2 electronics engineers paid Rs. 7 per hour
4 labourers paid Rs. 4 per hour
Output is measured in standard hours and 90 standard hours are expected for every 100 clock hours. During a period the following data were recorded.

Actual hours 

Actual pay 
Supervisors 
170 

Rs. 1,394 
Fitters 
820 

4,920 
Electricians 
420 

2,562 
Electronics engineers 
230 

1,725 
Labours 
280 

1,120 
Total 



1,650 standard hours were produced.
The factory director of Division B is anxious to gain the maximum information possible from the standard costing system. He sees no reason why the normal labour efficiency variance could not be divided into subvariances in order to show separately the effects of nonstandard team composition and team productivity in a similar fashion to the material usage variance which can be subdivided into mix and yield.
You are required to calculate labour variances.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0;LYV/LSUV = ;]


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cost,material,labour,fixed,variable,overhead,sales,profit,variance,reconciliation,standard,actual,formula interpretation,accounting.


